As the amount of global capital looking for a home grows ever larger, the changing real estate landscape presents new opportunities and challenges.

For example, property investors can expect to see a seismic shift in Europe’s residential market towards growth in the private rental sector, according to Alistair Elliott, senior partner and group chairman of real estate consultancy Knight Frank.

And changes in consumer behaviour mean that as online shopping increasingly becomes the norm, there is likely to be an explosion in demand for logistics and distribution hubs, says Elliott, who

took up the position in April 2013, and has been involved in a wide range of projects throughout the south east of England.

How has the UK market been reacting to all the political uncertainties in recent months?

In the last year or two, after several years of very aggressive growth in the housing market, things have settled down a bit. In the lead-up to Brexit, particularly, there was some hesitation in the market. And then we had the prospective election in North America. Actually the market reacted to those things surprisingly positively. So last year was a year of hesitancy but as we got to the end of last year and beginning of this year, the local market and the international market began to show some sign of resilience and recovery.

I think if there’s uncertainty about the Brexit discussion, if there’s uncertainty about if she will remain in power, that hesitancy will cause the market some concern

[Since the beginning of the year], the market began to come back to life. Volume has increased. Activity has increased. And then the general election was announced in the UK, and everybody expected it to reinforce the Theresa May administration; that didn’t work. That’s led to a degree of hesitancy, which I believe will be short-term, providing Theresa May’s administration takes control of the situation quickly.

I believe we need a clear direction, a clear leadership, a clear commitment from the Theresa May administration. I think if there’s uncertainty about the Brexit discussion, if there’s uncertainty about if she will remain in power, that hesitancy will cause the market some concern.

What are some of the current patterns in the real estate market?

The world of investment is growing. I believe last year something like 300 billion dollars were accumulated by the top 100 investors in real estate. One thing that is clear: every quarter that goes by, the money, the volume of institutional money, that is looking for a home is growing internationally. So we are trying to respond to that by finding as broad a range of assets as possible. So I think the real estate market is proving time and again, particularly in the environment of low interest rates, to be an attractive home for that investment capital. So the volume of funds over the last two or three quarters has been increasing all the time. It never ceases to amaze me, wherever it is in the world, the depth and the breadth of the investors looking at investments is increasing all the time.

What is the future looking like for the real estate market?

Any study you read suggests that any global city in the world is going to get bigger. There are two things that dictate the pace of growth. The main one is population growth. The second one is infrastructure. If the research is correct, and these key cities are going to keep on growing, then investment in infrastructure has to be a priority – that is a new trend. I think it has always been important. But I think it’s taking on a new importance. It applies to London as well as cities in emerging markets. You’ve seen it in China more than anywhere. The rate of growth [in Shanghai] just seems to be extraordinary. The growth of the tier-1 cities has been massive and now the growth of the tier-2 and tier-3 cities is catching up. If you look at the Guangdong-Macau-Hong Kong Bay Area, this is not what we are used to.

We have to see the government play a more active role in providing the right type of housing across all strata

What should the government do to accommodate the growth in the real estate market?

If the government is going to rely completely upon the private sector to provide the full breadth of housing, I think that’s an area which has to be changed. We have to see the government play a more active role in providing the right type of housing across all strata. Part of the accommodation will be provided by the private rental sector, which inevitably will provide opportunities for people who can afford to buy-to-rent instead, but I think even those might be beyond the reach of some people. It’s the government’s responsibility to cooperate with developers to provide the right type of housing. What I worry about is that simply putting transaction charges on deals doesn’t make housing more affordable.

What are some of the opportunities that investors are looking into?

So I think there’s going to be a massive shift in the residential market towards the renting sector. The technology industry is expanding, which is generating a need for different sorts of office space.

As real estate gets more expensive throughout the world, we believe there’s going to be a really significant growth across Europe in the private rental sector.

The technology industry is expanding, which is generating a need for different sorts of office space

I believe in the commercial market, we will see a massive resurgence in the value and importance of logistics and distribution. The key shopping centres will continue to thrive and they will change their shapes a bit. But the massive change towards online buying is going to produce a completely different need for real estate insofar as there are going to be many more distribution hubs. Some of them are going to be massive and some of them more local in order to enable efficient distribution.